>> cenk: i love that. and of course, all black panel he asks them who wind up magically agreeing with sean hannity. how white are we? i can't believe that jamie foxx would do this and of course, conservatives would never say any bad words like, for example bill o'reilly calling an atheist leader a fascist. it would never happen. get in the middle of the damn ring already hanny. it is a movie. he's joking, you idiot. "the young turks." we'll see you tomorrow. >> eliot: good evening. i'm eliot spitzer. this is "viewpoint." first it was wisconsin. then indiana. now michigan is the latest midwestern state where republican governor is

eviscerating the pouf of the unions. michigan today became the 24th state to enact so-called right-to-work laws. much like the michigan senate last week, along party lines the house approved right-to-work legislation which prohibits unions from requiring members to pay dus. without hesitation earlier this evening, governor snyder signed the bill into law. there is a simple reason that laws like the one signed earlier are bad policy and bad economics. there's nothing wrong with a tough negotiation between a governor and labor unions or between a ceo and his workers. economic reality has to drive such negotiations. when i was governor, i negotiated hard but change the rules so workers cannot be effectively represented by a union takes away a fundamental right of workers to be represented on matters central to their economic well-being. it is one thing to be tough in negotiations, it is quite another to destroy the capacity of the union to negotiate at all. by slowly bleeding funds away from the union that's exactly what these bills do. this is not about helping the

state in tough economic times. it is about destroying the unions. this is what president obama rightly said in detroit yesterday. >> obama: these so-called right-to-work laws they don't have to do with economics. they have everything to do with politics. it is giving you the right to work for less money. >> eliot: this is how governor snyder mischaracterized it. >> we'll get more and better jobs coming to michigan because we'll be more competitive. this is about being pro workers giving the workers a choice. it could be a positive for unions during the longer term. >> eliot: is this truly going to be a positive for unions then why were the police and firefighters exempted from the bill? my guess governor snyder wanted to keep the few unions that seemed to support him away from this bill. joining me now is michigan state representative and minority leader and former u.s. congressman from michigan mark shower who served in the michigan state legislature for 12 years. thank you both for joining us.

>> you're welcome. >> my pleasure. >> eliot: mark, let me begin with you. how could this happen in michigan? this is the bluest state we get. union movement has deep roots a deep history. what explains the dynamic that suddenly a right-to-work law a label i reject, how could this law pass in michigan? >> the irony is yesterday chrysler announced $120 million investment in michigan. 115 new jobs. michigan has helped lead the economic comeback for this country in part because of historic collective bargaining agreements between the detroit three and the united autoworkers. we have a labor management partnership that works. this, as you said was about politics. it was about gutting organized labor and the irony is i work for a labor management fund connected with a laborer's union and we invest almost $5 million a year in apprenticeship and training programs. we operate skilled workers to build complicated infrastructure projects like the governor wants

to build in this state. so it will make michigan less competitive. it puts us in a race to the bottom with low-wage, low-skill states, that's bad for our state. >> eliot: tim, you were one of the leaders in the legislature. many of us looking at michigan and think is a state that voted for president obama. just re-elected debbie stabenow to the senate. you are as blue as a state can be. what explains this tension almost this schizophrenia where you have a state legislature that seems to be taking away one of the core principles, one of the core values in fairness and equity not in -- in negotiating power so that you can do what mark just said that is right for the economy and workers. >> great question, eliot. i think it really boils down to this. that the republicans have managed to gerrymander state legislative seats in both the state house and the state senate which has allowed them to win fairly consistently majorities

in both the house and senate. despite the fact that the state as a whole, is very blue and they have used that power to access. we're talking about a republican power structure and republican legislative leaders and governor who are drunk with power and who have become hell bent on destroying the middle class in this state. as you rightly said, this is not about sound economics. we know that in states that have gone so-called right to work, that wages and benefits are driven down for all workers union and nonunion alike. this is about a vindictive power grab by republican leaders in the state and a desire to crush any and all forms of dissent. >> eliot: i want to pick up on something you just said because it is so important. the entire language used by the other side. right to work. how can you be against the notion of right to work. that's not what this bill is. it is a facade. it is twisting the language and twisting what actually the bill is all about. but the point you just made about the actual economic impact.

the governor snyder and others who support these bills say it leads to increased investment. more jobs. how do you read the economic data on that point? >> well, it is just simply not true. the states that have enenacted these laws that have unemployment rates that are as high or higher than those states that are not right to work. it is utter nonsense. the governor and similar right wing extremists who promote these laws are grasping at straws to justify their attempts to crush political dissent and destroy those groups who often support democratic candidates. >> eliot: mark, am i correct there is also, over time now there has been a chance to study this now 24 states that have a right-to-work law, of course, the data from michigan doesn't reflect what is meant yet. what happens to wames in states with a right-to-work law versus without. >> wames are about $1500 less

for families and this is not just for union workers but for all workers. unemployment rates in those so-called right-to-work states are higher. the poverty rate is higher. fewer people have healthcare. fewer people have pensions. these are all benefits that the labor movement has brought us. there are more workplace injuries. more workplace deaths and these are all things that the labor movement is -- has invested in and is responsible for providing for union and nonunion workers in their states. so michigan is on a downward trajectory. it's bad. as tim said. this is about politics. look the state chamber of commerce won in november. they defeated a collective bargaining constitutional amendment but dick devos billionaire from -- runs the amway corporation, they won but

they were also the ones that have been consistently attacking organized labor. they were behind this effort and they completely mischaracterized this as the ability for workers to decide whether to belong in a union or not. it gives workers now a chance to free ride or free load and receive all of those benefits from collective bargaining without paying for them. >> eliot: which means long-term -- that's right. this creates a free lord problem. we'll discuss that more later in the show which means long-term the union will lose its capacity to negotiate. you made a hugely important point, mark. the wage increase negotiated by unions extend out, radiate all to all workers in the economy. because they create a floor beneath which employers know they have to pay the floor to get good workers. explain that because people need to understand the benefits go to even nonunion members. >> well, that's right. michigan built the middle class. that was through the labor movement.

and it's because of those good wages that were negotiated and other employers followed. so i think the question is are we now and we are apparently in a competition for those low-wage low-skill jobs. that's exactly the wrong direction. >> eliot: tim, you were on the hill today. where your capitol is. what were the emotions? we see the visuals. certainly a lot of folks turning out. explain the emotions there. >> it was certainly heartening to see over 10,000 protestors turn out to express their frustration and their concerns about this anti-middle class legislation. and it lifted some of our spirits, of course, on the legislative floor. but ultimately, it has been a very frustrating day and the republican leadership did not simply pass terrible legislation but they did it in a very cowardly and underhanded way by rushing it through in the final days of a lame duck session. they suspended the rules so that

these bills didn't have to go through the normal committee process so that they didn't have to be inconvenienced by allowing public testimony and public input on these laws and they've ramrodded it through relying on the votes of extremist republican legislators who were just defeated in the election a month ago and they had to rely on their votes because most people are willing to vote for it because they don't have to ever worry about being held accountable by the voters. they're done. >> eliot: this will work against the republican party in your state politically. mark, i hear you were pepper sprayed today. i gather this was -- there is a little bit more than just chatter and polite conversation going on there. >> well, look, this was a civil expression of first amendment rights and as tim said, the people of michigan were shut out of this process. and so i was part of a huge crowd, in all of my years in

michigan politics, never seen anything like it. and people, union members and nonyun members were expressing their feelings to the governor across the street who had ignored them. we were doing it loudly but civilly and horseback police and then state police created a barrier between us and the building. i was actually trying to negotiate with the state trooper, introduced myself as a former legislate o and said what's your objective. they said to protect the building. i said let's create a line here. we won't cross it. next thing i knew, i was hit with pepper spray in my left eye and a number of my brothers and sisters were hit much worse. it was very unfortunate. >> eliot: the story will continue. both a political and economic story. we'll payloads of attention to it because it goes right to the heart of protecting middle class

wages, something at the essence of our economy. mark schauer and tim, thank you for coming on the show. why did michigan's governor suddenly do a dangerous flip-flop on right to work? congressman sandy levin joins us next. careers of tomorrow. share your current.com/knowhow tell us about how you've let nothing stand in the way of being ready for the future. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university we're teaming up with companies like cisco to help make sure everyone is ready with the know-how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu/knowhow. ♪ ♪

i think the number one thing that viewers like about the young turks is that we're honest. they can question whether i'm right, but i think that the audience gets that this guy, to the best of his ability, is trying to look out for us. >> eliot: when michigan's governor rick snyder ran for election in 2010, he adamantly

denied right to work as part of his agenda. this afternoon he signed it into law. sandy levin called the governor out in an op-ed in the descroit free press writing what the governor is unleashing is a right to freeload which will reduce resources for effective representation, increase tensions among employees and sow ill will just when we need cooperation to grow the economy for the benefit of all. unless the governor stands up to the special interests that persuaded him to make a 180-degree turn on this issue so fundamental to the fabric of our state, he will engender a michigan divided. joining me now is ranking member of the house ways and means committee and representative of michigan's 12th district, congressman, welcome and thank you for that powerful op-ed today going right at the governor for the flip-flop. first, explain the flip-flop. what happened and why? >> well, he had said it wasn't on his agenda. and then he got pressure from the radical right and essentially he turned 180

degrees. and it was more than a flip-flop. it was a dangerous turn not only for the state of michigan, i think for the country. you know, having a voice in the workplace, eliot, was critical for the development of the middle class. 40 some years ago i worked with two republicans governor george romney, gil milligan, to give a voice in the workplace to workers. in those days, a firefighter was making $5,000. a teacher was making $5,000. they had no voice. indeed when i called wayne state university if i might say recognize a union representing two people. they had the cards of both people. what was the response? we can't do that. i say why not? they said because the king can do no wrong. in other words republican

employer cannot find himself decent terms and conditions of employment. the law of some years ago changed that, gave a voice to people in the workplace and now under the leadership of this governor, they've turned their back, they've not only rode back the clock they've ripped off the hands. >> eliot: you're so right. the role of the union in giving workers a choice in equity and justice and helping the middle class has been beyond description. i want to quote a paragraph. it is a little long from your op-ed today. it goes to the heart of the fallacy of governor snyder's argument that he's making to justify his flip-flop. let me read this to you. these are your words. you'll enjoy them. the governor has said that under current law michigan workers have to join a union and pay dues. and that if they choose not to, they can lose their jobs. in fact, for many decades federal and state laws have made it clear that no one is required to join a union or to pay dues. and no one can lose his or her

job for refusing to do so. workers pay dues if they join the union but if they choose not to, the most they can be required of them, if it is negotiated into the contract by labor and management is that they pay an agency fee for their share of administering the contract. in other words, the governor's argument is wrong. explain this to our viewers why the governor is so wrong and they're making a false argument here. >> very simply. under federal and state law, this is the way it is. if a majority of people in a bargaining unit vote to be represented, that happens. but they have an obligation under federal and state law to represent everybody whether or not they're in the union. they cannot discriminate against someone because they're not a member of the union. so when the governor said that someone can be fired because they did not join the union false! absolutely false. when he said they could be fired because they didn't pay union

dus, false! all the law says is if the employer agrees to it, there can be a requirement that people who benefit fully from a collective bargaining agreement have to pay a fair share of that representation. that's a good, american idea. if you benefit, pay a fair share for that benefit. so i was just reading from the governor's statement i don't view this as anti-union. i view this as proworker. that's orwellian. >> eliot: congressman it is the tack of the far right to use orwellian language and to flip-flop in the way they describe the law. this is not a right-to-work law. this is a right to free load, explain. this is important. they're creating the right of those who don't want to pay anything to free load off the worker of a union -- the work of a union but ultimately, they'll

destroy the power of the union and it will be eviscerated. explain the notion of free loading. >> look, if people can free load and not pay their fair share there will be less of a resource for the union to represent people. therefore, the role of the union will shrivel. the role of the representative of the people. so we'll go back to the time when there was no voice in the workplace. that's what this is all about. i also want to read what someone else said this regard. he says i see this as tough love. the unions will not be busted. the purpose of this is to bust unions. to bust the voice of people. and i want to make this clear. this isn't about unionization. in and of itself. because there's been a voice in the workplace take the auto industry. we now have harmonious labor relations. management labor relations. if you ask any ceo of the big

three, they'll say do you think there should be a so-called right-to-work law and if they tell you what they really think they'll say no way because it disrupts a harmonious relationship. it puts a premium on people fighting among themselves within a bargaining unit and then they fight against the employer. it is 180 degrees in the wrong direction for the middle class of america and for harmonious labor relations. this is a tragic day in the history of the labor movement but more importantly in the history of michigan. >> eliot: i could not agree more. very quickly unfortunately time runs short. the argument made by the governor of michigan and others who support this wrongheaded law, is that it will help job growth. it will generate a flow of capital into the state. do you buy that? >> no, no. i think a very unharmonious michigan will not be a good place for people to come to do

business. essentially, having people fighting each other management, labor, fighting each other. this is not going to bring business to michigan. that is -- it is not true historically and it is not true in terms of what makes common sense. he has instead of creating a united michigan, a divided michigan and employers companies, aren't going to want to come and put their place down in a divide michigan, in constant, constant battle. it is a serious mistake all around. >> eliot: orwellian world of the far right. congressman sandy levin representative of michigan's 12th district. thank you. >> nice being with you. >> eliot: the economics of right to work laws. do they work? up next on "viewpoint."

[ male announcer ] this is karen and jeremiah. they don't know it yet but they're gonna fall in love get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married they'll find some retirement people who are paid on salary not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. >> eliot: opponents of right-to-work laws argue that what those laws really do as president obama said yesterday is provide the right to work for

less. proponents of right to work laws claim the laws spur economic growth and grant workers the freedom of choice. so who's right and who's wrong? joining me now to answer the question is mike elk a labor reporter for in these times. thanks for joining us. >> great to be on the show eliot. >> eliot: who do you think gets the better about the economic argument about the economic impact to a state's economy of a right-to-work law? >> what is so-called right-to-work law which regulates agency fees does is it robs a union of the ability to clip dues off of all of the members who benefit from a union contract. instead of having a union contract where everybody who is covered from it has to pay a certain amount of money to the people negotiating the contract, people that are in the bargaining unit don't have to pay money. only those who wish to so it makes it difficult for unions to maintain themselves and have the resources for bargaining, politics and other forms of representation. so that's what really happens. what winds up happening in right-to-work states is that union density winds up being

dramatically lower such as in the south. what epi found about a year ago is on average workers in right-to-work states, since there is lower union density they have less resources wind up making about $6,000 less a year than workers in states that are nonright to work. >> eliot: let me try -- you're saying so much. i want to distill it down and break out a couple of points. first, this is not a right-to-work law. this is a law that creates a freeloader problem. some people are going to say i want the benefits of the union but i don't want to pay and so i'm going to try to be a freeloader but long-term what that does is destroy the union's capacity to negotiate. >> it is like if i decided i don't like the republican leadership in the house i'm going to stop paying my taxes. >> eliot: that would be a nice option. they're not one they're giving to us because as part of a nation we all have to pay our taxes to contribute to the cost of the government. so because there is lesser union representation, you point out the power of workers is diminished.

they're paid on averager $6,000 a year less in those states with right-to-work laws. >> yes. >> eliot: that's a huge and dramatic impact. what in terms of job growth has been the lesson learned if any? >> i think what a lot of states it in the south argue is a lot of companies toyota and other companies going to the south because it is cheaper to employ workers there. they're making a lot less and unions are a lot weaker there. however, let's look at some jobs looking at indiana. last january of 2012, there was a lockout of about 500 caterpillar locomotive workers in london, ontario. they were making $28 an hour. the company wanted them to make $14 an hour. they were members of a union. they said no. caterpillar decided to move the jobs to indiana where the workers weren't members of a union and would work for $14 an hour. so sure some of the states get more jobs but the question is it a net overall improvement of jobs or is it moving jobs from

places like pennsylvania that are nonright to work to places like michigan that are right to work. >> eliot: what this leads to is the most important data point or trend line in terms of our economy which is the decline in median family income, the overall decline of wages in real adjusted terms over the past 30 years as the capacity to negotiate with employers has diminished. >> yeah, now let's look at the uaw alone in michigan. you're going to see the uaw my experience in covering unions in right-to-work states is only about -- in a good union maybe 60%, 70% of the workers will voluntarily give dues to the union. that's in a union shop where they're very active. that's in most right-to-work states. so i think what you're going to see in michigan as you look at the uaw it has 150,000 members in michigan. i think they're going to lose about 50,000 members. i mean my best-case scenario, what that translates to is a

loss of $30 to $40 million a year in dus revenue. it hurts the ability of the uaw to do things and is losing $30 to $40 million they'll be spending tens of millions to refill this later. >> eliot: one of the things that mystified me about the bill signed into law today why are cops and firefighters excluded. why is this good for workers? did he carve out the two unions that are friendlier to the republican party than any other? >> yeah, i mean cops and firefighters unions tend to be friendlier to the republican party. the police union i endorsed bush several times. cops and firefighters tend to be friendlier to republicans although many of them are solid democrats as well. so i think that's why he carved them out. he carved them out as well because cops and firefighters are seen as heroic people while other union workers are seen sometimes as being lazy. >> eliot: look, i was a governor. i had a lot of bills hit my desk. when there is an exception like that, you ask who put this in, why, what are the politics

behind it. if the government has any intellectual integrity behind what he's saying, is there any way he would have carved out two specific unions and said by the way, workers to use his language who don't want to pay their dues, i'm going to force them to do it anyway. why for those two unions? you brought up a point, it is some sort of political favor. he's trying to get a favor with some group. as you saw today at the capitol grounds, they needed a lot of cops to pepper spray people and keep crowds under control and fire up teargas cans. they're going to need these folks. that is clearly why. >> eliot: when i was in office, forget being in office, i'm a huge fan of the cops and firefighters. we all are but if the governor of michigan has any intellectual integrity, he will go back and be honest with the public about why he excluded only two unions from this pro worker law that he signed. mike elk labor reporter for "in these times," thanks for joining us tonight. >> thank you for having me on the show. >> eliot: robert reich joins

us next. the troops love me. before the sneeze, help protect with a spray. before the tissue, help defend with a wipe. before the cold & flu season help prevent with lysol. because when you have 10 times more protection with each hand wash... and kill 99.9% of germs around the house with each spray... those healthy habits start to add up. this season, a good offense is the best defense and lysol has your family covered because that's our mission for health.

[ piano plays ] troy polamalu's going deeper. ♪ ♪ and so is head & shoulders deep clean. [ male announcer ] with 7 benefits it goes deep to remove grease, gunk and flakes. deep. like me. [ male announcer ] head & shoulders deep clean for men. ♪ ♪ where you don't back down from a challenge. this is the age of knowing how to make things happen. so, why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away

if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to your doctor.

>> eliot: the attacks on unions most recently in wisconsin and indiana now in michigan are part of a much larger war. for more than 50 years unions in the united states have been steadily losing strength at the same time virtually along the same track real wages for most americans have been dropping. for perspective on that, let's bring in robert reich former labor secretary under president clinton, best selling book "beyond outrage" is now available in paperback. professor, mr. secretary what is going on out there? first, explain what is the

impact of these right-to-work laws on wages? >> well, very direct, eliot. in fact, right to work is a misnomer. it really should be called an assault on labor unions because those right-to-work laws that have been traditionally confined to anti-labor states make it very, very difficult to form unions. they say essentially there are no union dues. nobody can be required to join a union as a condition of getting a job which means why bother joining a union if you can get all of the benefits of unionization in terms of collective bargaining and everything else that follows without joining. it is a means of undermining unionization. it has been used for years in this country but now it is coming to the heartland. it is comes coming to wisconsin and michigan where unions started out. labor movement began in michigan, the united autoworkers was -- that was the union that everyone -- every other union every other working person

wanted to belong to. wanted to aspire to. they generated the kinds of wages and jobs in america that led to three decades of high-living standards for most americans. in fact, by the 1950s 1960s, over a third of all working americans belonged to a union. that meant they had the bargaining leverage to get good wages and good benefits. >> eliot: and so many different pieces to your answer i want to come back to. i want to begin with the last point. as the percentage of the american work force that was unionized has declined, the percentage of the gdp that has accrued to workers has also declined. there is a direct correlation there and you would argue causation as well. >> there is a direct correlation. it seems to make causation because as labor unions have declined, workers have had less and less power. and significantly the median wage has declined in tandem. in fact, over the last 30 years

most workers have seen no increase in their wages at all. well 30 years ago marked the major beginning of the decline of unionization in america. since the year 2000, the median wage is now 8% below adjusted for inflation what it was then and the attack on labor unions continues. right now in contrast to the 1950s, 1960s and early 1970s when more than a third were labor unions, right now fewer than 7% of workers are unionized. yet apparently that's still too much for the radical right for the billionaires, for the koch brothers, for sheldon adelson and others who have been fighting unions for years. they now in the heartland in michigan with republican majority, in a lame duck session of the michigan legislature they are pushing through anti-union so-called right-to-work legislation. >> eliot: look we certainly don't want to appear as though we're ignoring the other

multitude of factors that relate here. technology globalization. as you point out as the percentage of workers in unions has dissipated. only 7% are in unions in the work force the power of unions has withered and the negotiating power of workers has diminished compared to their employers capital and that, of course, has been reflected in wages. that's basic economics. >> it is also politics, eliot. because as the percentage of workers and unions have declined unions themselves have had less political clout to do things in washington to get things done on behalf of average working people. so, for example as globalization and technological change has affected the structure of the work force there's been no loud, organized force in washington that has said essentially no! we've got to have job retraining. we've got to have better education. we've got to have profit sharing. we have to have productivity sharing. we've got to have arrangements that while not counteracting

globalization, nevertheless counteract the effects of globalization and make sure the middle class is safe. without that union voice, the new class has become less and less secure. >> eliot: of course, as we all have learned over the past number of years, one of the critical elements of politics is the phrasing you use to describe an issue or problem saying these are right-to-work laws is a misnomer. first point you made this has nothing to do with the right to work. who can be off owessed to the right to work. this is about creating a freeloader problem that you described. explain once again what this really goes to the heart of. >> the heart of the matter is, to have a union, you have got to have benefits that go to everybody who is working at a particular plant in a particular company. the only way that a union can afford to maintain its bargaining position and its bargaining power is if everybody pays dues. everybody -- nobody can be a free rider. the minute you say nobody has to pay dues. nobody has to be a member of

this union then you're giving everybody an easy out. if you give everybody an easy out that says i can collect on the benefits of this union i can collect all of the negotiated benefits but i don't have to be a member, then why would anybody want to be a member? you are creating what is -- what economists call a free rider problem and that is the essence of the attack on unionization in this country. it has been the essence of the attack on unionization since the taft hartley act in the 19 -- right in the beginning of the 1950s. what we're seeing now is that coming home to roost. it was limited to just a few southern states, mostly anti-union states from the start. now it is coming to the heartland. it is coming to the heartland probably most likely because in 2010 the supreme court basically said we are taking away all of the constraints on political giving, political

donations, very wealthy people, companies, wall street. now basically, the constraints are gone. we have a bunch of republican legislatures and republican governors even in heartland states like michigan and wisconsin certainly that are willing and eager to take on unions because that's what their patrons want. >> eliot: our time is up but i want you to come back in the near future because your blog posting which put this into the larger context of the other elements on the assault on middle class income from the taxes, the budget cuts, all directed at the middle class and the poor as opposed to the wealthy is hugely important. >> unfortunately, part of the same big picture. >> eliot: we need you to explain it some other day in the next couple of days. former labor of secretary robert reich, thank you for your insights. >> thank you very much. >> eliot: fox news makes misleading remarks about jobs numbers. comedians. that's why for my upcoming benefit for victims of hurricane

sandy, i booked the strongest, smartest comics i could find. my comedian friends and i will raise money to rebuild homes and lives one laugh at a time. so tune in next friday for my all star comedy special. >> together we can get new yorkers back to yelling at strangers and ignoring our friends.

cheese plate...nope. i made something better. ♪ ♪ you used the oven? boom ♪ ♪ [ male announcer ] pillsbury crescents. let the making begin. [ female announcer ] why settle for plain bread? here's a better idea. pillsbury grands! flaky layers biscuits in just 15 minutes the light delicate layers add a layer of warmth to your next dinner. pillsbury grands biscuits let the making begin.

>> eliot: i've said it before. facts matter. facts do matter. let's get to the facts. >> eliot: in tonight's facts matter segment in often repeated line from the romney campaign was that government doesn't create jobs. only the private sector creates jobs. of course, that statement in itself is hardly based in reality. now the job creation myth has taken 180 degree turn as conservative web sites and commentators are claiming the almost all of the jobs created in the last five months have

been government jobs. the claim being made that 73% of all new jobs in the past five months in government was first reported on the conservative web site cns.com and soon made its way over to the fact deficient folks at fox news. where it was repeated by republican congressman pennsylvania's tim murphy. >> over the last five months, when you look at the upward swing now, the improvement in people being hired unemployment rate 73% according to the department of labor, 73% of those new jobs is federal government, state government and local government. we want to see it in the private sector. >> eliot: while it is nice to see some on the right finally acknowledging the government is capable of creating jobs, the 73% number signifies nothing. yes, the number is accurate and the past five months, 847,000 jobs have been created and 621,000 were government jobs. however, the reason they're only tracking the past five months is because if they started in january, they would see that government jobs are actually

down for the year and that it is actually government workers who have been most affected by the recession due to state and local governments being forced to lay off workers in order to balance budgets. here are real numbers. since president obama took office in january of 2009, the number of government jobs has dropped by 678,000. the number of private sector jobs has increased by nearly 1.5 million. i know congressman murphy may not think so but facts matter.

>> eliot: we saw it last summer and we're seeing it again. and now the g.o.p. using the debt ceiling as a tool for political means. last night on the show, we discussed senate minority leader mitch mcconnell not only speaking out out against his own debt ceiling proposal from last year but also misleading the american people about what the debt ceiling is. in an attempt to prevent the nation's debt from continuing to be used by republicans to hold the economy hostage new york congressman jerry nadler along

with three democratic colleagues have a bold idea, eliminate the debt ceiling completely. congressman nadler joins me now. congressman, explain this. how can you just eliminate the ceiling? make sense of this to us. >> the ceiling is completely superfluous. some people think that eliminating the debt ceiling means you borrow more money. it is not true. you borrow money based on decisions that were made a year or two or three years ago in the budget. the budget defines how much money you're going to raise what tax rates will be, how much you're going to spend and so forth. what the debt ceiling says is unless you raise the debt ceiling, you can't pay the bills. perhaps you shouldn't have incurred the bills but you did. we cannot have the full faith and credit of the united states go up in smoke. we cannot have the united states not pay its bills. that would totally destroy the economy. so what the republicans are doing in effect, it is like an old gangster movie. gee, that's a nice restaurant you have there. pity if it should happen to blow up. that's what they're threatening to do to the economy by not

raising the debt ceiling unless they get their way on budget cuts. >> eliot: you're not only so correct but it is an important point, the debt ceiling will be raised only to accommodate bills and decisions already voted upon by congress. >> already voted upon. budget's already adopted two and three years ago. if you don't need to increase the debt, lower taxes but that's a different decision and a different debate. >> eliot: for the republican leadership now to hold the debt ceiling as hostage or hold the american people hostage saying we won't vote to increase the debt ceiling even if it's required by our own decisions from last year, is sort of an act of extortion because they voted for the budget. they voted for the tax cuts. >> it is totally extortion. if you don't give us what we want, we will collapse the economy and throw millions of people out of work. that's what it's really saying. frankly, it just shouldn't be. now, we've raised the debt ceiling 77 times since world

war ii. seven times i think during the administration of george w. bush. and normally the party that doesn't have the president demagogues a little bit and everybody votes for it because the economy demands it be voted for to. hold the economy hostage and say we'll blow up the economy unless you grant us our demands is outrageous. we should get rid of the debt ceiling and pass budgets that make sense on their own merits. >> eliot: mitch mcconnell implicitly accepted your logic last year when he proposed something similar to this when he said look, let the president issue the debt and let congress vote against it and if it wants. but the president has the authority to issue the debt as needed and so mcconnell basically acknowledged this was an active political theatre and not a decision that had to be made by congress. why is he flip-flopping and speaker boehner not flip-flopping. >> i think speaker boehner is flip-flopping because he doesn't

control his own conference. he's subject to pressure from the far right wing of his party which doesn't care about the deficit. all they care about is shrinking the federal government so as grover norquist said, it could fit in the bathtub. they don't want social security. they don't want medicare or the government to do all of these things that they started doing the last 75 or 80 years. they want to use this as blackmail to get congress and the president to do things they would never do on the merits. >> eliot: your bill will not make it through the house given the current control of the house. last year, the white house made i think what all of us agree is an egregious tactical and strategic error in not negotiating the debt ceiling increase as part of the budget deal. will they make the same mistake this time and isn't it necessary they include the increase as part of what the speaker and the president agree to in the near term? >> the president has said he wants to -- that he's not going to repeat the mistake. he said he wants the debt ceiling raised now as part of

this negotiation. that he's not going to have an annual blackmail of the debt ceiling after you solve all of the other problems, you have another go at it. you whack the budget in order to avert the fiscal cliff. now let's whack it again. even below what we agreed to. in order to avert fiscal disaster by not raising the debt ceiling. he said he won't indulge in that. unfortunately, the president has also said he won't use or threaten to use the implicit authority many constitutional scholars think the president has to ignore the debt ceiling because the 14th amendment provision that says the full faith and credit of the united states will not be questioned. >> eliot: i wanted to pick up on that threat because while i'm not persuaded you would win that argument, it is a powerful argument. why do you think the white house took that issue off the table? they certainly could have used it as a negotiating ploy lingering out there saying look, pursuant to the constitution you just cited the provision the president must act to protect the full faith and

credit of the united states. therefore i -- why did he not use that as a more powerful weapon? >> i don't know, frankly. there are constitutional scholars who say that the debt ceiling is unconstitutional. just the idea of the debt ceiling is unconstitutional because it conflicts with section four of the 14th amendment. there are constitutional scholars who say the opposite. it has never been tested in court so we don't know. why the president has surrendered the possibility of using that as a negotiating leverage, again, this year as he did last year, i don't know. he may be a constitutional purist and have decided the issue himself. >> eliot: we know he's a constitutional law professor. maybe he knows more about that provision than we do. i wish he would continue to use the provision certainly as a lever to negotiate. when it comes to the fiscal cliff, you have to go back to that quickly. are you going to be there on december 31st at 11:59 voting on a deal or will there be something beforehand? >> all of the commentators seem

to think there is going to be a deal. i don't know. the republicans seem to be caving in or beginning to set the door to cave in on agreeing to some tax rate increases. but a deal that says what some people are talking about will increase the tax rates to not as much as they were under clinton. and return will put a limit on cost of living increases for social security, will increase the eligibility age for medicare. as the republicans are demanding is not an acceptable compromise as far as i'm concerned. you have a lot of democrats voting against any such agreement. >> eliot: you are raising the critical issue that has not gotten any substantial and necessary attention as it should which is what will the cost-cutting be. where will it come from? how will entitlements be affected if at all and why? we have to have that conversation. >> the most obvious way to get money out of -- first of all

social security shouldn't be part of the discussion anyway. it has nothing to do with the deficit. medicare the only thing that should be on the table but i haven't heard anybody mention it is that you could save i think about $350 billion over ten years if you simply allowed medicare to use its volume purchasing power and negotiate prices with the pharmaceutical companies. as the veterans administration does. there is noately reason why medicare pays a lot more for the same prescription drugs as the v.a. except that the republicans put that limitation in the bill ten years ago. >> eliot: i may be wrong about this. i thought the number was $800 billion but i may be wrong. either way you're exactly right. there are huge dollars to be saved if we were not acting irresponsibly in terms of the way we spend money without limiting benefits, raising eligibility. >> what i find particularly hypocritical is we just came through an election campaign in which the republicans were bashing the democrats for taking